Accenture Interactive | Point of View Series

Monetizing the Personal Touch

Gear up to meet the multichannel marketing challenge

Monetizing the Personal Touch

Gear up to meet the multichannel marketing challenge
Digital disruption is the new normal. No longer confined to a channel or a standalone strategy, digital is now a core reality. As consumers interact across channels on a daily basis, so companies need to maintain an omnichannel presence. In todays always-on, alwaysconnected world, mailboxes both virtual and physicalare overflowing, a myriad of online stores and traditional providers are vying for a share of the (electronic) wallet, and media is filtered by consumer-driven preferences. Without control of the market forces and consumer demand dictating the run of play, how will the corporate world respond? What are the implications for marketing spend or supply chain? Can physical and virtual merchandizing become integrated?
Customers always look for convenient and personalized servicesthe right product in the right place at the right time. Sounds simpleand it was when products were few, shops consisted of the general store or local high street, and retail hours were from nine to five, six days a week. But in todays digital marketplace where customers can literally get anything, anywhere, anytime, knowing how to deliver a personalized service and making it cost effective are no longer simple tasks. The success that companies such as eBay and Amazon in the United States, Taobao in China, and Rakuten in Japan are enjoying through delivering a tailored and relevant online experience is well documented. Without the complexities of bricks and mortar stores, traditional business models and legacy infrastructure, these online retailers are forging ahead. There are also examples of traditional retailers or consumer goods companies that are rising to the challenge by making the in-store experience an engaging and efficient one for customers. For example, digital receipts are growing in popularity after being introduced by Apple in 2005 as a convenience for the customer and a relationship touchpoint for retailers. Another example is Nordstrom Inc., a leading clothing retailer in the United States, which has focused on in-store customer services to build a trusted relationship, making the shopping experience as personal and enjoyable as possible. Other examples include Aholds Stop & Shop supermarket chain, which has been delivering timely in-store promotions to customers through its handheld shopping application for a number of years; and retail powerhouse Walmart is aligning its in-store video streaming to be as relevant as possible to customers who shop in specific aisles where the monitors are installed. When Whole Foods Market, the natural and organic supermarket chain, learned that many on-the-go clients, especially in cities like New York, just dont cook at home, it not only started stocking its aisles with tasty precooked foods, but also created a welcoming in-store shared table to encourage customers to stay back, enjoy their meal and meet interesting people. However, most multinational companies today are falling short of delivering customers with a unique experience across offline, online and mobile channels. With seemingly infinite sources of consumer data detailing purchase history, interests, life-stage, lifestyle, and a host of other personal preferencesknowing how to craft actionable insights to drive business decisions is proving a mighty task. The ability to restructure the organization to deliver a very personalized and relevant experience to a range of potential and existing customers across multiple channels, all day, every day, will be essential to survival in the digital marketplace.

Offline, online, on-the-go Since consumers can move seamlessly between online and offline channels without distinction, companies realize that they can no longer have a separate marketing strategy for different channels. Customer-centric businesses are shifting their focus from treating digital as a distinct channel, to creating an integrated customer experience across all channels. Today, the consumer base is no longer homogenous nor geographically restricted, but highly heterogeneous and global, with very diverse preferences, cultures, technology awareness and socio-economic mix. To be able to tailor specific messages and offerings to different consumers, companies will need to build detailed consumer profiles from multiple sources using advanced analytics techniques enhancing understanding of likely buyer values and preferences, stage a consumer is at in the buying cycle and key influencers. Through this granular approach companies will be able to respond quickly to consumer requests with contextually relevant messages, and begin to anticipate consumer needs based on similar buying patterns.

Stepping stones The challenge of personalization then is not about obtaining data, but how to select and analyze the right data to drive real consumer insights, and how to commercialize it to deliver business results. To maximize the marketing return on investment (MROI) companies need to be able to attract, serve and maintain customers by delivering relevant products and services at point of needto achieve consumer relevance at scale.1 This may seem like an overwhelming challenge at first glance, but companies can meet this challenge by developing a wellthought out roadmap using an integrated marketing strategy. At the heart of this roadmap is the ability to reach consumers at the most granular level by making macro marketing programs, such as circulars, emails or out-ofhome messaging, more personalized and relevant. By developing multiple identities of offline and online customers, which can then be used to create inquiries with

respect to their predicted buying patterns, companies can pursue a proactive marketing approach, enabling real-time responses across multiple touchpoints. Instead of pushing messages and promotions out and hoping some consumers will find them relevant, companies can create a marketing environment, both in-store and virtually, which attracts potential and existing customers alike.

So, how to shift gears to achieve the more relevant customer-centric experience required in todays multichannel, competitive marketplace? There are five fundamental steps that will help marketing executives avoid being left behind in the industry shakeup.

1 Baiju Shah and Nandini Nayak, Got the R Factor: Driving breakthrough performance in the Era of Relevance, 2012

Steps to customer-centricity
There are five fundamental steps that CMOs should consider when restructuring the marketing organization to meet customer needs.

Acknowledge the Present State

It is important to understand the current situation within the company and marketplace today. With physical stores increasingly being seen as showrooms by consumers who want to try on their items before buying online, retailers need to take a hard look at their value proposition. Most traditional companies are saddled by silos of departments such as marketing, merchandizing, operations and supply chain, each organized around specific business processes and functions. These silos are now becoming an impediment to organizations wanting to become customer-centrica transition that online retailers have been relatively successful in making. In the absence of an integrated internal structure, companies are forced to buy customer data, compounding the issue, as data syndicators cannot reach the granularity required. Competing companies end up with similar insights leaving the market with few true innovators. Breaking down these internal silos and bridging the gap between product and customer value is a key first step in this journey.

Value: Define the values of a customer to the enterprise and know where different customers fit into the value spectrum whereas some companies take too rudimentary an approach, others limit the number of contextual views or tiers and never drill down to a granular level to understand customer preferences. Behavior: Build consumers shopping profileshow frequently they come to the store and how broadly they shop across the store? Really getting to know a consumer on an individual basis and developing a personal relationship will be a key differentiator for retailers. Motivations: What motivates consumers to make a purchaseis it brand, taste, quality or price? Is it a combination of priorities? Or, are consumers motivated by some other factors? If so, what are those factors? Intent: Understand the potential value of a consumer based on contextual indicators. What are they buying elsewhere and why? What are the consumer needs that can be identified from life-stage? A well-developed strategy that recognizes the value and potential of consumers to the enterprise, describes that value in terms of product-specific behavior. It communicates across the organization in ways that allow the different functional silos to build and deliver on channel-centric tactics, reflecting both the product and customer growth agendas. Of course, such a strategy needs to have the commitment of all the departments within a company and be aligned across different departments, and it needs to be driven by a clear, top-down business strategy.

Build an Integrated Strategy

Companies should next look at the overall customer strategy and identify the macroand micro-marketing activities that are required to achieve business goals. There is little point in taking a 30 second TV spot in the Superbowl or a reality show, with audiences in the millions, for a product which has a target audience of 25,000. This integrated approach across functional areas requires companies to understand several aspects about consumers.

Develop an Information Infrastructure

Understanding the sources of data and being able to draw on them effectively to create actionable insights will be key to developing an effective information infrastructure. It is impossible to strategize, plan, act and measure results in todays multichannel universe without data analytics and an underlying process that recognizes the need for different levels of granularity of consumer behavior. For example, senior executives of a company need to have an overview of consumer behavior across markets or brands; analysts doing product assortment require data related to SKUs, select customers and select stores; and marketers may want contextual insights into all consumers who buy diapers but not formula, and who respond well to a coupon delivered at the register. Any data infrastructure supporting this level of granular analysis needs to be able to integrate multiple, exclusive and non-exclusive consumer contextspurchase behavior, basket size, channel attitude, product preference, to name a few. The potential of big data lies in finding details across lots of data points that can be utilized effectively (or made actionable) in a small data environment. Companies need to understand which data is most critical to their business and which data adds the most value. For example, which products did a consumer put in his basket but then decide not to buy? Was a promotion coupon redeemed? Customer data management is steeped in the legacy of list generation to support direct mail, call centers, and more recently emails. However, todays marketers must continuously touch, influence and engage the customer in a timely and relevant manner; a handful of segments are no longer enough. More importantly, to scale

marketing influence in real time and to make it work, marketers need to go beyond pushing out communications; instead, they need to respond to opportunities to connect with consumers as they occur. This is easier to achieve online through responding to search queries. But companies should continue to look for ways to recognize potential customers in their store, or even in a particular aisle, anticipating and responding to specific needs or intent.

Next Gen Point Of Sales Traditionally many organizations have aligned themselves to a point of sales (POS) system and customized it to a point where it can no longer be supported by the original vendor or easily migrated to a new agile system. By adopting an integrated, agile POS technology, organizations are able to benefit from providing a seamless experience across all offline and online channels, as well as pricing alignment, digital receipting and the like functions. Customer Insights And Analytics Today, customer analytics technologies are able to provide insights across a range of areas including, micro segmentation, customer value modeling, pricing optimization and assortment. Consequently, a business intelligence capability is crucial for generating specific customer-centric insights that are aligned with the organizations business strategy.

With no single technology able to harness the potential of data, agility is the most important capability businesses are chasing. For various reasons, many organizations that aligned their businesses to the industrial strength solutions of technology providers, today need to adjust their technical infrastructure accordinglya process that can be very cumbersome and expensive. Many analytics leaders offer a host of technologies, while organizations such as Facebook and Google have built their own analytics engine that aligns closely to the objectives of their unique business models. To achieve an agile technical infrastructure, leading organizations subscribe to a set of common components: Granular Data Warehouse Utilized to capture non real-time transaction data, consumer behavior, master data and other third party complimentary data assets. This data repository is often employed to democratize the data for use across business silos. Real Time Data Store These real-time or near real-time big data stores provide access to all the timely contextual data to support point solutions for immediate decisions such as recommender systems for promotion at the point of interaction with the consumer.

Select Enabling Technologies

Restucture the Marketing Function

Unlike a few years ago when marketing organizations had the luxury of planning in yearly cycles, today they need to adapt their marketing strategies to weeks, days or even seconds, to stay ahead of their competitors. From raw materials and manufacturing to distribution and retailing, the different departments within a company need to have a 360 degree view of consumers. Marketing will be infused across the organization from strategy and business planning, to merchandizing, supply chain and customer service, to manage the customer experience as one. We are entering an era of virtual everything, where all players and channels will effectively collaborate. Increasingly, companies will be competing and cooperating at the same time with one objective: to harvest maximum customer value and share customer requirements with other departments within their respective companies.

Make it personal and make it count Todays consumers are fickle, impatient and demanding. True or False? While it is true that they are price-savvy and timepressured, consumers also respond to good service, relevant offers and time-efficient experiences. Consumers can be the biggest fan, broadcasting recommendations for products and services and connecting with brands across multiple channels and networks. Knowing how to interact with

the consumer and committing to build the necessary infrastructure to support those interactions wherever, whenever they occur, will be critical to delivering a personalized experienceone that counts at the bottom line. Tomorrows winners will include companies that have the commitment and leadership today to take the necessary steps towards creating a proactive and customercentric marketing environment.

To learn more about how to monetize a customer-centric marketing strategy, contact:

Milton Merl milton.merl@accenture.com Seth Marlatt seth.m.marlatt@accenture.com

About Accenture Interactive

Accenture Interactives 1,500 professionals help the worlds leading brands drive superior marketing performance across the full multichannel customer experience. Leveraging the full scale of more than 259,000 Accenture employees serving clients in more than 120 countries, Accenture Interactive offers integrated, industrialized and industry-driven marketing solutions and services across consulting, technology and outsourcing powered by analytics. Follow @AccentureSocial or visit www.accenture.com/interactive.

About Accenture
Accenture is a global management consulting, technology services and outsourcing company, with approximately 259,000 people serving clients in more than 120 countries. Combining unparalleled experience, comprehensive capabilities across all industries and business functions, and extensive research on the worlds most successful companies, Accenture collaborates with clients to help them become high-performance businesses and governments. The company generated net revenues of US$27.9 billion for the fiscal year ended Aug. 31, 2012. Its home page is www.accenture.com.

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